Tuesday 20 February 2018

French politicians fear Siemens strength after rail deal

A scale model of an AGV high speed train with the logo of Alstom
A scale model of an AGV high speed train with the logo of Alstom

Alexander Huebner and Cyril Altmeyer

French politicians voiced concerns yesterday that a planned multi-billion dollar merger of the rail assets of Alstom and Siemens could give the German company the upper hand.

Two sources said the French company plans to pay shareholders a special dividend if the deal does go through.

Siemens is expected to opt for a deal with Alstom rather an alternative with Canada's Bombardier, sources said.

Siemens Mobility is set to be merged into Alstom, in which Siemens would hold 50pc plus one share, while the chief executive would be Alstom's current boss Henri-Poupart Lafarge.

The likely transaction has political ramifications, since the French state owns around 20pc of Alstom.

A special dividend would even out the value of Siemens and Alstom, which has too much cash on its balance sheet, to smooth the intended 50-50 joint venture, one of the sources said.

"Will there be a special dividend? Yes," said the second person.

Siemens and Alstom are strong in high-speed intercity trains with their ICE and TGV models. Siemens is also the leader in signalling technology, while Bombardier - whose transportation headquarters are in Berlin - is stronger in commuter and light-rail trains.

Siemens stands to gain control of Alstom's main business, since all of Alstom's divisions deal with the railways and transportation industries. Several politicians and French trade union activists have expressed concerns over France losing control of its TGV high-speed train - a symbol of national pride that has highlighted French engineering skill - and over possible job losses. (Reuters)

Irish Independent

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